At a time when the world is handling a progressive sugar price decline, Indian subcontinental sugar supply is down, forcing prices up.

In Pakistan, government radio on January 3, 2025 sent a statement detailing how the state will rein in the steep prices.

During the broadcast, the Minister of Industries and Production Rana Tanveer invoked an inter-provincial meeting to control prices.

Tanveer also noted that the shortage is “artificial,” implying the seasonal trend by brokers and millers to hoard the sweetener. 

According to the Pakistan Observer, ex-mill prices hiked by about 10 Pakistani rupees ($0.036) per kg in early December 2024. At the same time, shopkeepers increased theirs by 15 rupees ($0.054) to the kilo.

The wholesale rate in late 2024 reached 125 rupees ($0.45) per kg while the retail equivalent hugged the 140-rupee ($0.50) mark. 

This is rather a beguiling rise because it is smack on the sugarcane crushing season, which falls in the final months of the year.

Besides, sugar crushing in late November 2024 managed 13,000 tonnes daily against a daily consumption rate of 18,000 tonnes.

This trend is mirroring a similar artificial shortage scenario in November 2021 when retail sugar reached 160 rupees ($0.57) a kg.

Raising MSP in India

Meanwhile in India, real shortage has prompted the government to contemplate raising the minimum selling price (msp) of the commodity.

On January 6, 2024, the Minister of Food and Consumer Affairs Oiyush Goyal suggested upping the current longterm msp.

Since 2019, the msp has remained at 31 Indian rupees ($0.36) per kg, streamlining affordable household sugar prices in India. 

Pressure is mounting from sugar factory unions, which are suggesting a new minimum of between 39.4 and 42 rupees ($0.46-0.49).

This pressure follows an October-December 2024 sugar production drop by 16%, to 9.54 million tonnes, year-on-year.

Notably, the subcontinental sugar shortage and eventual price rise happens when the world grapples with low prices.  For one, London sugar futures in late 2024 posted their lowest price in the past 2 3/4 years. But as the statistics below show, India and Pakistan boast huge sugar-consuming margins that sometimes run contrary to world trends.

Subcontinental Sugar Statistics 

Both India and Pakistan boast high stakes in world sugar production, export and consumption. Firstly, India is both the second biggest sugar and sugarcane-producing nation. Its annual production of sugarcane hovers at 439,424,890 tonnes, as of 2022, according to FAOSTAT. Pakistan, meanwhile, ranks 7th worldwide in both sugar processing and exports, according to the Pakistan Institute of Development Economics (PIDE).

Does India meet its domestic sugar needs?

Since India sometimes curbs  exports, it is able to meet domestic sugar consumption needs of 27.025 million tonnes (2021-22). This leaves an export surplus, for the country produces up to 34 million tonnes (2023-24).

What causes sugar shortage in India? 

Exports, the production of ethanol from sugarcane and rising consumption all account for sugar imbalance in India. India’s sugar consumption growth rate, for instance, touches  2.2% per annum while the world’s rate is only around 1%.

Does Pakistan meets its domestic sugar needs? 

From 2010 through 2018, Pakistan produced surplus and therefore met its sugar consumption needs of 18,000 to 22,000 tonnes daily. During this period, exports of the surplus generated $2.3 billion in revenue. The revenue also earned the country a top 10 sugar export ranking, globally. 

When did domestic sugar prices begin to rise in Pakistan? 

Since 2018 following a popular sugar export subsidy of 5.35 rupees ($0.019) per kg, shortage knocked and retail prices rose.  Before that, retail sugar cost 55 rupees ($0.20), but in December 2024 was up to 140 rupees ($0.50) a kg.